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St. Luke's Hospital in San Francisco on Friday, October 19, 2007. Event on 10/18/07 San Francisco.
Erin Lubin / For the Chronicle
Ran on: 10-20-2007
St. Luke's Hospital would lose its acute-care beds under a reorganization plan by parent California Pacific Medical Center.

Photo: Erin Lubin

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St. Luke's Hospital in San Francisco on...

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View of the Cathedral Hill Hotel on Van Ness, where California Pacific Medical Center is moving forward to build its new $1 billion hospital.
Event on 7/30/05 in San Francisco. JAKUB MOSUR / The Chronicle MANDATORY CREDIT FOR PHOTOG AND SF CHRONICLE/NO SALES-MAGS OUT

St. Luke's Hospital in San Francisco's Mission District will no longer be an acute-care facility after 2009, but become an outpatient "hub," providing emergency care and services that don't require a hospital stay, according to a plan announced Friday by California Pacific Medical Center.

Downgrading St. Luke's to an ambulatory care center is part of a $2.4 billion master plan by Cal Pacific, the city's largest private nonprofit hospital, which includes a $1.7 billion proposal to build a 425-bed hospital on the site of the Cathedral Hill Hotel on Van Ness Avenue at Geary Boulevard.

In addition to the changes at St. Luke's, Dr. Martin Brotman, Cal Pacific chief executive officer, also announced:

-- The hospital's Pacific campus in Pacific Heights eventually will become an outpatient facility like St. Luke's.

-- Three new clinics will be built, in the Stonestown area, the Excelsior and Potrero Hill. Cal Pacific also has opened the Bayview Child Health Center on Evans Street.

-- Acute-care services ultimately will be concentrated at Cal Pacific's Davies campus at Castro and Duboce streets and its new Cathedral Hill hospital.

State laws that require California hospitals to meet seismic safety standards by 2015, at the latest, add momentum to Cal Pacific's plans. Hospital officials hope to have the Cathedral Hill facility built by 2014.

But, judging from the immediate reaction of city and county health officials, Cal Pacific will have a tough time getting city and county approval for the changes at St. Luke's. And the hospital needs that approval to go forward with its plans to build a hospital at Cathedral Hill.

Katz argued that the plan leaves one acute-care facility - the public San Francisco General Hospital - in the South of Market region, while it concentrates eight hospitals in the northern, generally more affluent parts of the city. He also didn't think providing the St. Luke's neighborhood with emergency services - but not a hospital to back up that care - made sense.

"It isn't optimum care," Katz said. "If you had something serious, would you want to go to a hospital where, if it turned out you had something serious, they couldn't take care of you?"

The future of St. Luke's has been in question since 2001, when the independent Cesar Chavez Street facility was absorbed by giant hospital operator Sutter Health, also the parent company of California Pacific.

Sutter Health took over the hospital after St. Luke's in 1999 sued both Sutter and Cal Pacific on antitrust grounds, claiming they were undermining it by luring away doctors. On Jan. 1, 2007, St. Luke's became the fourth "campus" of Cal Pacific.

St. Luke's has long been a money-losing operation, racking up $30 million to $35 million in annual losses in recent years.

With a high number of patients who are uninsured or on government programs like Medi-Cal, the hospital has had a hard time making ends meet. St. Luke's also handles less severe cases, which are reimbursed at lower rates, because higher-level services are concentrated at other campuses.

Only 50 to 60 patients are hospitalized at St. Luke's on any given day, leaving about 60 percent of the hospital's beds empty, hospital officials said. In addition, they estimate that about 85 percent of St. Luke's annual 30,000 emergency visits could be handled in a primary or urgent-care setting.

Brotman called it "impractical and unrealistic" for Cal Pacific to continue to absorb St. Luke's losses and said turning St. Luke's into an outpatient facility with an emergency department will allow the hospital to continue to offer services in the area.

"It would have been easiest to let (St. Luke's) pursue its path to bankruptcy," he said. "Then there would be nothing."

Judy Li, chief administrative officer for St. Luke's, said the plan will improve services for residents in the Mission and surrounding areas by offering the care they need that also is sensitive to cultural and language differences.

"What I see in front of us is a fundamental opportunity for us to improve the health of underserved patients," she said.

But several labor leaders aren't buying the hospital's arguments.

"You cannot have an emergency room without a hospital," said Chuck Idelson, spokesman for the California Nurses Association, which is embroiled in a labor dispute with Sutter-affiliated hospitals in the Bay Area. "It is an empty promise to the community. To have an intensive care unit without an operating hospital ... it is impossible to have real emergency care services."

Sal Rosselli, president of Service Employees International Union United Healthcare Workers-West, a Sutter critic, said he's been expecting this announcement since Sutter took over St. Luke's. "The problem is no amount of profit is enough for them," he said.

Katz, of the Public Health Department, said Cal Pacific should invest in St. Luke's and create a state-of-the art facility that will draw top-notch physicians as well as patients from nearby Noe Valley and Glen Park who are more likely to have private insurance.

"The reason I believe they don't want to build on St. Luke's campus is because they don't want to see more people without insurance and on Medicaid," Katz said.

Brotman rejected the accusations. "There will be voices raised that suggest our motives are other than what they are," he said. "The proof is in the outcome."

The future of St. Luke's Hospital

The St. Luke's campus of California Pacific Medical Center no longer will be an acute-care facility with inpatient services after 2009.